Subpoenas And Consumer Notices

In judgment recovery, one tool is discovery,
where you attempt to find your judgment debtor's
available assets. In most states, you can schedule a
debtor examination,
and then subpoena records from the debtor themselves
or third-parties having knowledge about your
debtor's assets.

When a debtor is a person, in some states; their
private
information is considered a consumer record; when that
information is
requested with a subpoena served upon a third-party
bank, employer,
school, utility company, attorney, accountant, health
care provider, etc.

This article is my opinion, and not legal advice. I am
a judgment
referral expert, and am not a lawyer. If you ever need
any legal advice
or a strategy to use, please contact a lawyer.

In some states (See our article
Which States Require Debtor Notices)
there are additional laws to protect consumer-related debtors.
For example, California and perhaps in Indiana; before a
third-party can release any of your debtor's private
information, they
must have proof that your debtor was properly served a
"notice to consumer",
(which is sometimes mailed separately)
included in the subpoena paperwork served upon the
debtor.

While Federal courts,
and most states, do not currently require notices to
the consumer when
subpoenaing third-party witnesses; I expect laws will
change in the
future, to increase the usage of such notices.

In California, the laws related to consumer notices
(e.g., CCP 1958.3 and
CCP 1985.6), are sometimes debtor-friendly because they
let any person or
company/partnership with less than 5 people; get even
more advance notice
that their judgment creditor is asking about their
financials, possibly
giving them more time to transfer or hide their assets.
Of course, if you
already know where your debtor works or banks, you can
avoid tipping them
off, and simply begin a levy action with the Sheriff without
communicating with the judgment debtor.

Notices to the consumer slow creditors down. In
jurisdictions that require
them, before third-parties can disclose any private
debtor information, a
notice to the consumer is first served on the debtor.
In California, you
must wait at least 5 days if the consumer notice
(Judicial Council Form SUBP-025)
was personally served, and at least 10 days if the
process service was done by
mail. After the waiting period, you include the
consumer notice and proof
of its service, with the subpoena paperwork that is
served upon the
third-party witness. In California, witnesses are
entitled to witness fees
as per California Evidence Code 1563; so include a
check to the
third-party with the subpoena paperwork that you give
to your registered
process server.

In jurisdictions that require consumer notices, most
allow third-parties
20 days to provide the information requested with the
subpoena served upon
them, that includes the proof of service of the notice
to consumer. While
subpoenas can be mailed to third-party witnesses (in
California see CCP
2020.410), serving them by mail gives them 5 extra days
to respond. Also,
if subpoenas are not personally served, there is no
recourse when someone
ignores a mailed subpoena.

In California, if personally served - you
have to wait more 5 days before you can
serve the subpoena (from the date of personal service).
If served by mail - you have to wait 10 days before you
can serve the
subpoena (from date of mailing) Why not do both? Mail
them, get that
clock started and have them served personally.
Whichever of those clocks
allow you to serve the subpoena first is the one you
use.

If a personally served subpoena is ignored by a
third-party witness, or
you get nothing except their written objection, you
will probably need to
sue them to get the information. In California, this is
either covered by
CCP 1992, and/or you will need to file a court motion
to compel that
witness to appear and then produce the subpoenaed
documents.

With Federal court judgments (including bankruptcy
courts, where subpoenas
are governed by FRCP 45 and FRCP 9016), there seems to
be no law requiring
a notice to consumer to be sent. Despite this, in a few
Federal court
judgment recovery cases in California, a debtor's
lawyer has brought up
CCP 1958.3 and the need to serve the consumer notice
first; and more than
once, a Federal court judge in California has agreed
with them, which does
not make sense to me, because Federal law generally
outranks state law.

If you have a Federal judgment, or in states that have
no subpoena-related
consumer notice laws, that also means there is no
waiting period if you
choose to send such a notice anyway. Even if not
required, it might
sometimes be a good idea to include a consumer notice
disclaimer with the
debtor examination subpoena package served on the
judgment debtor.